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Dive Brief:

Michigan utilities have weighed in on the draft outline of a statewide energy assessment called for by Democratic Gov. Gretchen Whitmer, prodding Public Service Commission staff to consider gas supply arrangements and the impact of "recovery uncertainty and barriers to timely infrastructure investment recovery."

A draft of the report is expected July 1, and the final assessment is due Sept. 13. Whitmer ordered the review earlier this month, after a January fire at a Consumers Energy gas compressor station interrupted deliveries and limited gas generation.

The fire, combined with cold winter temperatures, forced Consumers Energy and DTE Energy to ask customers for voluntary reductions of electric and natural gas usage. The report will look at the need for supply duplication.

Dive Insight:

The Jan. 30 fire at the Ray Natural Gas Compressor Station had far-reaching impacts, ultimately pushing the governor to order a hard look at the state's total energy system.

Damage from the fire forced Consumers to halt gas flows from the station — the largest source of working gas capacity in the state. With demand high due to extreme winter temperatures, the utility was forced to arrange for
more natural gas supplies, increase production at two storage fields, and limit natural gas used for electricity generation.

The broader state energy assessment will include a "review of fuel arrangements to meet customer demand in Gas Cost Recovery proceedings," according to the draft outline. Consumers, in its comments, recommended expanding that to "include an evaluation of redundancy as part of the natural gas fuel arrangements."

"Moreover, any utility directives addressing perceived supply adequacy or redundancy shortfalls should also include a contemplation of regulatory recovery aligning incremental costs with customer class benefits," the utility said.

"The company urges the Staff to change 'fuel arrangements' to 'supply arrangements,' broadening the topic to include storage and transportation assets to meet customer requirements," DTE wrote.

DTE asked that a discussion of "fuel procurement" be broadened to "fuel procurement and gas supply," to allow for "discussion of both electric and gas fields."

DTE also asked staff to add a discussion surrounding "the impact of recovery uncertainty and barriers to timely infrastructure investment recovery. Similarly, a discussion of redundancy is necessary in evaluation of fuel arrangements under the Gas Cost Recovery," the company wrote.